Investor group intervenes in M&B bust-up

Britain's biggest shareholder group has made an unprecedented intervention in the battle for control of the boardroom at beleaguered pubs group Mitchells & Butlers.

Fair fight: ABI has urged members not to lend out shares in the All Bar One owner

The Association of British Insurers has urged its members, who account for 20% of all shares invested on the stock market, not to lend out their holdings in the All Bar One owner ahead of a crucial vote at next month's annual meeting.

It is the first time the ABI has ever issued such guidance and highlights the fact it wants a fair fight between the two warring factions.

Lending out stock is now commonplace, with long-term investors such as pension funds receiving a fee for doing so. In return they surrender voting rights over the shares.

If successful, the ABI embargo would prevent dissident investor Joe Lewis having a disproportionate say in the way M&B is run.

The owner of the pubs chain has been a loggerheads with Lewis, who has 22.8pc of the shares, for months.

M&B (down 3.1 to 256p) has ousted two of his board representatives while arguing with him over the appointment of Simon Laffin as chairman.

Lewis has now put up his own slate of non-executive directors and a vote on the appointments, including Laffin's confirmation as chairman, will take place on January 28.

The ABI wants to see a fair scrap in the battle for who takes control of the board and so has asked members not to loan out their shares.

'This will avoid the risk of the voting result being distorted,' said the ABI.

The association's intervention came as M&B sent a letter to shareholders giving a blow by blow account of its dispute with Piedmont, Lewis's investment firm.

It revealed Lewis has personally become embroiled over the appointment of a new chairman and that he had a stormy conversation with M&B chief executive Adam Fowle.

A Piedmont spokesman said: 'We are not commenting on the letter which is one contested version of events.

'Investors should focus on the four strong board nominees who have offered themselves for election and deliver long term value for all shareholders.'